Negative equity and interest only mortgage

Halladubha72

Hi I am in dire straits and I’m hoping someone out there can give me some advice. We are 25 years married next year we took out a mortgage when we got married and should be mortgage free next year but 13 years ago I got a brainwave to remortgage the house and invest in a second house. So we did this and the bank gave us a five year interest only mortgage with European tracker rate and then it was to be reviewed. We got a tenant And the rent covered the mortgage so everything was great we were just going to hold onto it for one or two years because house prices were going up and up and up and then were going to sell it, pay off the mortgage and make a nice few pound for ourselves. But this all went pear shaped as shortly after we bought it house prices kept going down and down and down and our house was in serious negative equity. We held off for the five years to see what would happen and things just got worse. For some reason to this date 13 years later the bank has never come back to us about the interest only mortgage. They write to us with statements and tell us when the interest rate goes up and down but they have never Discussed changing from an interest only mortgage. We need to do something about this at both of us are hitting 50 we have a family home that we owe another €60,000 on we owe € 171,000 on the second house and it’s not worth €120,000. Selling our family home is not an option as we built on my family’s land and made a promise that we would not sell when my parents are still alive as they did not want strangers living next door. My husband is on the verge of a nervous breakdown and I’m trying to reassure him but I don’t know the answer myself and I don’t want to approach the bank because I’m afraid I’m going to rock things. Has anyone got any advice as to what we can do as I’m very worried about my husband’s health

If you sold the second one, and remortgaged your primary home to cover the negative equity could you afford a repayment mortgage of 110k until you retire?

Have you taken any advice from experts - not particularly from your bank itself?

The bank probably haven't come back as they know it is a second home and you are paying the interest.

If you are on a tracker rate they might be do you a deal to get it off their books.

Are ye working? Could ye pay a repayment mortgage of about €800 per month?

antix80

Stop worrying for one thing. You're in a good position. There's a good chance you'd get a write-down on the second property if you asked the bank, and the bank are probably only too happy that you can cover the interest.

You might be surprised how much that 2nd house is worth. Have you approached an estate agent?

Even if you had €50k negative equity on property 2, I'd be fairly certain your main house is worth more than €60k. If you refinanced, you might have a lower interest rate, you have 2 incomes, 15 years until retirement, and an outstanding mortgage of only €110,000... why are you in dire straits? It's a manageable situation.

I don't think the OP confirmed there are two incomes.
There are public and charitable bodies you can talk to.
They advertise on the TV these days.

If you haven't already done so you should talk to them and you will have a much clearer idea of what is possible.

Don't talk to the bank first - get some independent advice.